The Business of Pot

“Washington is a pioneer. Our companies and brands will lead the way.”

Jody Hall of The Goodship Company and Cupcake Royale emphasized the first-in-the-nation status that our state, along with Colorado, holds in the world of recreational cannabis at GSBA’s Business of Pot event. Conversations among panelists and the audience returned again and again to both the serious business around this newly legal industry as well as how to make it better for everyone.

Hosted by Tuxedos and Tennis Shoes/Dsquared Company at their Melrose Market Studios and sponsored by Leafly during the arrival of the big fall windstorm, guests came prepared to network and to build solid business connections. From growers to producers to retailers, and from financing to marketing to legal assistance, every facet of the industry was represented. We had long-time members like Sally Schultz, a commercial mortgage lender who has expanded her business to include 502 financing, and brand-new members like Vela, a hypermodern extraction lab and store.

A superstar panel of experts, moderated by longtime GSBA member Jody Hall, discussed the economic impact, opportunities, and challenges of Washington’s cannabis industry. Alison Holcomb of the ACLU was the author of Initiative 502 which legalized recreational cannabis in Washington in 2012. “My vision for I-502 was always for it to be the first brick thrown through that window,” she explained. “The work isn’t done, and there are still more bricks to be thrown, but that first hole is there with cracks spreading across the glass.”

Sam Méndez of the Cannabis Law & Policy Project discussed the tremendous revenue that Washington has raised with the highest excise taxes on cannabis projects – significantly higher than any other state, but still slightly less than we levy on alcohol. Over $180 million in excise taxes have generated funds for prevention and funding for various state agencies, but an increasing proportion is being added to the general fund to make up for significant shortfalls elsewhere, such as education funding. As with the gold rushes of eras past, Sam said that “Lots of people are dreaming of riches,” but that very few will actually achieve them in this competitive landscape.

Dockside Cannabis Director Oscar Velasco-Schmitz, another longtime GSBA member, argued for a stronger distinction between medical and recreational uses. He also added that the most promising entry into the cannabis industry is through ancillary services such as marketing, design, and legal. Meg Owen, Senior Digital marketing Manager at Leaflydescribed their tremendous growth in many of those various services that Oscar described. Describing itself as the “Yelp of pot” Leafly is the world’s largest cannabis information resource and does nearly everything except handle the product itself. Leafly has an extensive cannabis business development program that assists aspiring entrepreneurs reach the largest audience, create targeted marketing campaigns, and connect with resources for every step of the way.

The end of the panel raised several complex but deeply important questions about the industry. “How can we build an industry that lives up to our values?” Holcomb asked. Hall said that her companies were trying to institute intentional policies to hire people from groups disproportionately impacted by the war on drugs and to give them equity in those businesses. An audience member brought up the devastating impact that the War on Drugs has had on communities of color, while many of the biggest beneficiaries of legal cannabis are white people who also have easier access to capital. Méndez urged that Washington belatedly follow the example of Oregon’s legalization process, which included the automatic expunging of past cannabis convictions.